Obama Administration Introduces Short Sale Program

A program will take effect on April 5 that will encourage homeowners at risk of defaulting on their mortgage to short sale their homes.

The program will pay the homeowner $1,500 and the servicing bank another $1,000 to coordinated a short sale, explained the New York Times.

Short sales occur when a home is sold for less than the amount owed on a mortgage, said the New York Times. Investment pools will receive more money in a sale than in a foreclosure, and homeowners will receive less damage on their credit rating.

The Huffington Post says over a million homes were lost to foreclosure last year, many because the homeowners had two mortgages.

An existing $75 million mortgage readjustment program, the Home Affordable Modification Program, introduced by the Obama administration has failed to help a single homeowner, reported the Huffington Post.

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This page contains a single entry by danie380 published on March 7, 2010 10:02 PM.

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